Mycorrhizae are ubiquitous symbioses established between fungi and plant roots. Orchids, in particular, require compatible mycorrhizal fungi for seed germination and protocorm development. Unlike arbuscular mycorrhizal fungi, which have wide host ranges, orchid mycorrhizal fungi are often highly specific to their host orchids. However, the molecular mechanism of orchid mycorrhizal symbiosis is largely unknown compared to that of arbuscular mycorrhizal and rhizobial symbiosis. Here, we report that an endophytic Sebacinales fungus, Serendipita indica, promotes seed germination and the development of protocorms into plantlets in several epiphytic Epidendroideae orchid species (six species in two genera), including Dendrobium catenatum, a critically endangered orchid with high medicinal value. Although plant–pathogen interaction and high meristematic activity can induce the hypoxic response in plants, it has been unclear whether interactions with beneficial fungi, especially mycorrhizal ones, also involve the hypoxic response. By studying the symbiotic relationship between D. catenatum and S. indica, we determined that hypoxia-responsive genes, such as those encoding alcohol dehydrogenase (ADH), are highly induced in symbiotic D. catenatum protocorms. In situ hybridization assay indicated that the ADH gene is predominantly expressed in the basal mycorrhizal region of symbiotic protocorms. Additionally, the ADH inhibitors puerarin and 4-methylpyrazole both decreased S. indica colonization in D. catenatum protocorms. Thus, our study reveals that S. indica is widely compatible with orchids and that ADH and its related hypoxia-responsive pathway are involved in establishing successful symbiotic relationships in germinating orchids.